Debt Settlement & How It Can Save You Thousands On Credit Card Bills
Keywords: debt, debt relief, debt consolidation, debt negotiation, debt settlement, bill consolidation
Debt settlement, also known as debt negotiation, is a method used to permanently eliminate certain types of debt. Often reserved as a last attempt to collect a debt prior to writing it off as uncollectible, creditors are sometimes willing to accept a reduced financial settlement in order to fully satisfy a debt.
Currently, there are a number of non-profit organizations who are designed to offer debt negotiation services on behalf of debtors. Debt settlement companies, as they are often called, will contact each creditor and attempt to negotiate a settlement that reflects a fraction of the actual account balance. Depending on your available funds, a debt negotiation may require a lump sum payment or a structured payment program. For instance, you may owe a creditor $7,000.00 and have fallen terribly behind with monthly payments. A successful debt negotiation may result in a settlement of 20% or more of the total balance payable as either a lump sum or structured payments over a specified number of months.
Depending on the amount of the forgiven debt, which is calculated by subtracting the settlement amount from the original account balance, you may receive an IRS income voucher from the creditor. This means that, in some cases, you may be required to pay taxes on the forgiven debt.
One of the most common questions that individuals have regarding a debt settlement program is how their credit report will be affected. Many will say that debt settlement is damaging to a credit score; but compared to the alternative of having continually reported late or missed payments, debt settlement shows that you have made an attempt to repay the creditor within your means. Once a creditor accepts a debt settlement, they will report the account as “Settled Account” or “Settled in Full” to each of the three credit reporting agencies, including Experian, Equifax and TransUnion. Every 12 months, you may obtain a free copy of your credit report from each of the three credit reporting agencies noted above.
Unlike bankruptcy, which can remain on your credit report for up to 10 years, debt settlement notations will expire in 7 years. Once a debt is settled, your obligation to the creditor is over and they will not continue to pursue collection efforts against you for the forgiven amount. Every lender knows that bankruptcy laws exist and when a debtor cannot afford to pay their bills, filing is a very real possibility. If this happens, the lender knows that they may ultimately receive a small portion of the debt or, in some cases, nothing at all. Therefore, most are willing to negotiate a fair settlement to end their interest in the debt and to avoid having to pursue legal action in order to collect payment.
Depending on the total amount of debt that you currently owe, a debt settlement program may take several months or even several years to complete. As a final thought to debt settlement and/or debt negotiation programs, they are one of the industry’s best kept secrets that allows debtors to get a handle on their finances and happiness in their home.
Brian Dolezal is a contributing editor for TopConsumerReviews.com (www.topconsumerreviews.com) a leading provider of independent reviews and rankings for hundreds of consumer products. You can find out how top debt relief programs compare by visiting TopConsumerReviews.com today.
Previous Articles Highlighter:
How To Identify The Major Economic Factors That Are Important In Forex Trading (1)
The great thing about Forex is that you can make money either way. News that is necessary for the Forex trader is of much greater detail than the typical investor is interested in or even cares to follow.
About Rose Gardening (2)
Dig a hole about twice the size of the rose's root ball and just as deep. As you plant, mix compost into the existing soil to increase water retention.
How Do You Rate Home Gyms? (3)
It really depends on what your personal goals and what you are looking to get from your workout. This is the main thing that influences rating home gyms and how you do so.
Getting Your Vegetable Garden Ready For Spring (4)
Keywords: vegetable gardening, spring Whether you suffer through harsh, cold winters or enjoy relatively mild ones, we are coming up on the time when you need to get ready to plant your seeds for your vegetable garden.
Top 5 Elements To Look For In Acne Treatments (5)
Let's face it - life is hectic and there isn't always a lot of extra time in the day. Therefore, acne treatments that are both easy to understand and use are some of the most popular on the market simply because they have the ability to offer results with minimal inconvenience.
Can You Profit From Affiliate Marketing Without A Website? (6)
We all know how powerful affiliate marketing can be in link building campaigns. But instead of providing for links to your own website, you could provide your affiliate links instead.
Some Great Website Business Models (7)
It's time to build your house. But there are many kinds of houses, with each type serving a particular need. In the same light, there are many kinds of websites, and each type would also serve a particular need.
How You Can Really Work At Home (8)
If you really value your job, you will eventually find the will to work. It could be difficult at first, considering that you can always change your mind and leave things as they are, but you should always keep in mind that the earnings you get from working at home are the ones that pays the bills and buys all the necessities in your life.
Direct Distance Education: Five Things To Consider (9)
3. Don't settle for a program that doesn't fit your needs. If the online school you want to attend does not offer the exact program you are looking for, you needn't be discouraged.
Beginner Mountain Bike Skills (10)
Get a feel for your pedals. Practice moving your foot away from the pedal, first while sitting on your bike with one foot on the ground. Next, move on to releasing and replacing your foot while pedaling around for a bit.
Newer Articles Highlighter:
The Benefits Of Compost (1)
To promote decomposition of the compost the pile must be aerated. This can be accomplished by occasionally turning the pile over with a shovel or loosening it up with a pitchfork.
Is Vintage Fashion Coming Back Stronger? (2)
The same applies to shoes as a vintage size 5 is not the same as today's size 5. A comfortable fit is what you are after as with all clothes if it feels and looks good then size doesn't matter.
Your Credit Rating And Loans - The Facts (3)
This is because lenders worry that if you only have a mobile phone, you would be harder to locate if you were to default your secured loan payments. Whether you rent or own your own home could have a great influence.
7 Best Strategies To Sell Your House Fast (4)
1. Start to see the house not as a home but a product to be marketed to general public. This may not be easy in the beginning; especially of you have lived in this house for many years and have fond memories.
Back Issues Of Magazines (5)
Either we have way too many of them or we cannot find the ones we want. These publications serve many purposes for many people but they can pile up at a moments notice.
How To Spot An Internet Business Scam! (6)
You make money by signing up a downline. These pyramid-like programs are big on hype. You're encouraged to sign up lots of affiliates who, in turn, are going to make money for you by signing up more affiliates.
Who Couldn't Use A Little Extra Retirement Cash? (7)
Make sure it has a verifiable track of success with other customers. And it should offer a money back guarantee. After all, extra retirement cash may not be for everybody.
Golfing Holiday - Loire Valley France (8)
This translates into lots of available tee times and no crowds on a course. There is ample space in front of you and behind you while playing golf in France.
How To Combine Internet And Network Marketing For The Best Results (9)
Having a system in place to capture names and email addresses is great. Then follow up with them by autoresponder to drip information about yourself and your company to educate your prospect.
Plasma Screen TV (10)
Maybe I should buy that plasma after all. Satellite Purchase is an informative resources site about everything Satelitte related. Find out how Satellite Purchase can expand your horizons at www.satellitepurchase.info
Permalink to Debt Settlement & How It Can Save You Thousands On Credit Card Bills